Upcoming AWS Coverage on Campbell Soup Post-Earnings Results
LONDON, UK / ACCESSWIRE / November 29, 2016 / Active Wall St. announces its post-earnings coverage on The J. M. Smucker Co. (NYSE: SJM). The company released its second quarter fiscal 2017 (Q2 FY17) earnings on November 17, 2016. The producer and marketer of branded food products worldwide reported decline in sales for the second consecutive quarter, hurt by lower demand for Folgers coffee, Jif peanut butter, and pet foods. Register with us now for your free membership at: http://www.activewallst.com/register/.
One of J. M. Smucker's competitors within the Processed & Packaged Goods space, Campbell Soup Co. (NYSE: CPB), reported on November 22, 2016, its first quarter results for fiscal 2017. AWS will be initiating a research report on Campbell Soup in the coming days.
Today, AWS is promoting its earnings coverage on SJM; touching on CPB. Get our free coverage by signing up to:
http://www.activewallst.com/registration-3/?symbol=SJM
http://www.activewallst.com/registration-3/?symbol=CPB
Earnings Reviewed
For the three months ended on October 31st, 2016, J. M. Smucker generated net sales of $1.91 billion, which decreased $163.8 million, or 8%, including $67.7 million attributed to the divested U.S. canned milk business. Excluding the non-comparable divested business and foreign currency exchange, net sales decreased $96.2 million, or 5%. Analysts were expecting revenue of $2 billion. J.M. Smucker's Q2 FY17 net income rose to $177.3 million, or $1.52 per share, from $176 million, or $1.47 per share, a year earlier. The company's adjusted earnings per share came in at $2.05, an increase of 7% from Q2 FY16, reflecting incremental synergy realization, a lower tax rate, and fewer shares outstanding. The results surpassed market expectations of adjusted earnings of $1.94 per share.
Segment Results
During Q2 FY17, J.M Smucker's U.S. Retail Coffee segment's net sales decreased $86.7 million to $551.8 million, primarily reflecting the impact of $62.0 million of non-comparable net sales in the prior year related to the divested U.S. canned milk business. Volume/mix reduced net sales by 4% driven by the Jif® and Pillsbury® brands, partially offset by growth in Smucker's® Uncrustables® frozen sandwiches. The segment's profit decreased $8.4 million to $186.5 million. Net sales for the Folgers brand declined 10% with lower net price realization and volume/mix contributing. For the Dunkin' Donuts brand, sales were up 4% as lower pricing was offset by strong volume/mix growth for bagged and K-Cup offerings. Coffee segment's profit grew 3% compared to the prior year with the segment's margin increasing 300 basis points to 33.8%.
U.S. Retail Consumer Foods segment's net sales fell $86.7 million, or 13%, to $557.3 million during Q2 FY17 due to the impact of $62.0 million of non-comparable net sales in the prior year related to the divested U.S. canned milk business. Volume/mix reduced net sales by 4% driven by the Jif® and Pillsbury® brands, partially offset by growth in Smucker's® Uncrustables® frozen sandwiches. Sales for the Smucker brands were up 4%, driven by return to double-digit growth for Uncrustables frozen sandwiches.
U.S. Retail Pet Foods segment's net sales fell $35.7 million in the reported quarter to $531.0 million, primarily due to volume/mix, which reduced net sales by 5%. This was driven by the Meow Mix® and Kibbles 'n Bits® brands. The segment's profit decreased $0.5 million to $114.5 million as the impact of volume/mix offset lower manufacturing costs, incremental synergy realization, and a decrease in marketing expense.
For Q2 FY17, J.M. Smucker's International and Foodservice segment's net sales decreased $7.1 million to $273.8 million, reflecting non-comparable sales of $5.7 million in the prior year related to the divested U.S. canned milk business. The segment's profit decreased $3.9 million to $51.7 million, reflecting the impact of the divested U.S. canned milk business and an unfavorable net impact of pricing and costs, which was partially offset by volume/mix.
Balance Sheet
During Q2 FY17, J.M. Smucker reported that cash provided by operations was $136 million compared to $276 million in the prior year which included benefits related to the company's working capital initiative. Factoring in capital expenditures of $34 million, free cash flow was $103 million in Q2 FY17. Cash provided by operating activities was $136.4 million.
Earnings Outlook
J. M. Smucker reiterated its outlook for fiscal 2017. The company is expecting adjusted earnings in the range of $7.60 to $7.75 per share. J. M. Smucker is projecting net sales to decline 2% to 3% with comparable sales in the range of flat to down 1%.
Stock Performance
J. M. Smucker's stock is trading slightly up by 0.42%, closing Monday's session at $126.99 on volume of 911.08 thousand shares, which was higher than its 3 month average volume of 861.52 thousand shares. The company's shares gained 5.14% since the beginning of the year. Additionally, the stock has advanced 5.21% in the last twelve months. The company's shares are trading at a PE ratio of 20.70 and have a dividend yield of 2.36%.
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